Sentiment eroded early in February after hitting a two-year high of 96.9 in January.

Researchers at the University of Michigan said that rising energy costs and worsening labor market conditions at the lowest income levels was behind the decline.

Gasoline prices were up 10% from late January to late February.

Much of the economic concern was concentrated in the Midwest, researchers said.

"While the data are still consistent with a soft-landing, it is only 'soft' on average, as some parts of the economy suffer much more than others," said Richard Curtin, the director of the survey.

The current conditions index slipped to 106.7 in late February from 108.3 earlier in the month. This is down from 111.3 in January.

The expectations index fell to 81.5 in late February from 83.7 previously. The index is down from 87.6 in January.

Too few interviews were conducted following Tuesday's stock market decline to have an impact on February's data, researchers said. The March results will indicate the impact of the declines in stock prices on consumer confidence.

Greg
Robb

Greg Robb is a senior reporter for MarketWatch in Washington. Follow him on Twitter @grobb2000.

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